Monica Singer, the former CEO of South African central securities depository Strate, stepped down at the end of August 2017. Monica had been the project manager of Strate since its inception, and has led the organization for nearly 20 years. She will concentrate full time on blockchain.
Maria Vermaas, who has been Head of the Legal and Regulatory Division since the start of Strate, has been appointed as Interim CEO. The long-standing executive team will continue to drive strategic objectives, according to an announcement from Strate, which adds that Monica is leaving “to fulfil her dream of living in Cape Town and to pursue new opportunities”.
“Monica’s entrepreneurial spirit, together with her visionary leadership” drove the introduction of electronic settlement for South Africa’s financial markets. Strate is proud of “being a Conscious Company that creates shared value for all stakeholders” and globally recognized as one of the most progressive CSDs.
Monica says (in the statement): “I have always had a passion for innovation and technology that drives societal change. With the potential disruption that the financial markets may face, particularly with disruptive technologies like blockchain, I will continue to research to stay ahead of developments which may lead me to consulting on these topics.”
She has been key in several networks that share ideas internationally including as Vice President of the Africa & Middle East Depositories Association (AMEDA), over 18 years in the International Securities Services Association (ISSA), World Forum of CSDs (WFC) and Americas’ Central Securities Depositories Association (ACSDA).
Strate Chairman Rob Barrow, comments: “The Board, together with the Executive team and staff, would like to thank Monica for her contribution to Strate and the legacy that she has left behind. We would like to wish her all the best for her future endeavours.”
Full time in blockchain
According to this news story by Michael de Castillo on Coindesk, Monica is devoting her considerable energies “to dedicate her career to bringing blockchain to industries from finance and insurance to medicine and retail”.
“In her first conversation with the media since her resignation, Singer explained how she believes the tech could help her finally cut out what she describes as ‘unnecessary middlemen.’
“Singer told CoinDesk: ‘I’m so in love with blockchain, that the only thing I’m doing, all the time, is telling the world, “Guys, wake up! This is coming, and this is going to change the world.”’ According to the story, Monica will use her global contacts to widen her interest beyond the financial sector. The article mentions ethereum startup ConsenSys and digital ledger startup Ripple among the “fintech” companies Monica is interested in working with.
She still believes CSDs can provide important services, even if blockchain means they will “not have a role to play” in the blockchain world. She is set to speak at the Sibos banking conference in October on blockchain in the cash and securities settlement space and at the World Federation of CSDs in Hong Kong in November.
It quotes her saying: “I love saying to people: ‘Give me a brief description of your industry.’ I can quickly tell them in which way that industry will be affected by this new, incredible technology. So, that’s what I need to do.
“I was the person who moved South Africa’s financial markets from paper to digital.. When I discovered blockchain, I thought this is exactly what we need in the world.”
Brief history of clearing and settlement in South Africa
Johannesburg Stock Exchange rang the final bell on 108 years of open-outcry trading on 7 June 1996. Most recently trading had been in a huge hall at the bottom of its then headquarters in Diagonal Street, so the noise of trading filled the whole building when the market got busy. From market open on 10 June all equity trading has been on the automated Johannesburg Equity Trading system. As volumes increased, stockbroker back offices talked about “how many feet of work do you have?” referring to the huge piles of share certificates and transfer forms stacked high on desks, while the motorcycle delivery drivers at the back of Diagonal Street and Kerk Street, Johannesburg, got ever busier.
Electronic clearing and settlement were urgently needed but the banks that dominate this aspect of capital markets had each invested in their own systems. They had further formed the Bond Market Association to create a self-regulating bond exchange in 1990 and had worked with the South African Reserve Bank the same year to form UNEXcor to set up an electronic settlement system using a CSD. The first fully electronic settlement through UNEXcor and the CSD (called CD Ltd) had been on 26 October 1995.
Monica, famous for long-term vision backed by unstoppable energy, was brought in to break the logjam and move the market forward in 1998. Gold-mining group Harmony was the first equity on the JSE to move to full dematerialization of securities in 1999 and the whole market followed in orderly stages.
According to a brochure by Strate a few years ago: “The transition to an efficient electronic-settlement system increased market activity and improved the international perception of the South African market by reducing settlement and operational risk in the market, increasing efficiency and ultimately reducing costs. Accordingly, by heightening investor appeal, Strate has enabled South Africa to compete effectively with other international markets and not just those of emerging markets.
“Since 2000, Strate has used the South African Financial Instruments Real-time Electronic Settlement system (SAFIRES), an adaptation of the Swiss securities settlement system (SECOM), operated by SIX SIS Ltd, to continuously provide investors with secure and efficient settlement of equities.”
UNEXcor merged with Strate in 2003 and as the platform became more aged, Strate began market consultation to replace the technology and move to a Securities Ownership Register for bonds.
Participants set up the Money Market Forum in 2002 for dematerialization of money-market securities and awarded the contract to do this to UNEXcor, which devolved to Strate after the merger. After extensive market consultation, Strate developed the business requirement and employed Tata Consultancy Services (TCS) to develop the code. Successful testing was completed on 1 October 2008 and Rand Merchant Bank issued the first electronic security to Strate via FirstRand Bank in November 2008. Electronic settlement of newly issued money market securities began in the second half of 2009.
The latest transformation was the switch to T+3 settlement across the South African capital market, carried out successfully on 11 July 2016 and profiled on this blog.